Unknown (sort of) Head of State

BUENOS AIRES – Type Swiss President “Doris Leuthard” into Google. You will get about 450,000 results. Do the same with Donald Trump, and the number is closer to 396 million. That’s 87,900% more references. The world’s press is as fascinated by President Trump as it is indifferent to President Leuthard.

Doris Leuthard, President and energy minister of Switzerland. She has won her second presidential term this year. It basically doesn’t matter… she is primus inter pares, as the Swiss Federation is actually administered by a body of seven people (the Federal Council), modeled after the ancient Athenian polis system. The president does not enjoy greater political power than her colleagues – there is no single “boss”. We have written about the unique Swiss political system in greater detail here.

Photo credit: Jacques Demarthon / AFP

What will Ms. Leuthard do next? What outrageous new tweet will she send out? Whom will she attack? No one seems to care…

And yet, though we have never met either one of them, we have a suspicion. Ms. Leuthard is probably decent, earnest, and wholesome. She has never killed anyone, and it would take her a while to even get used to insulting people.

Mr. Trump, on the other hand, is in another category. Impervious to ridicule as to the fires of hell, he is especially well suited for the role he has been given. Mr. Trump accused “conservatives” of blocking his health care reform.

The conservatives say they want real change, not fake reform. That was the day before yesterday. Yesterday, he told them to “obey or else,” according to The Washington Post. And who knows – he may join with Democrats to override the Freedom Caucus veto.

Grand Chutzpah

In Switzerland, the president barely ever sells a newspaper and rarely chases the child molesters and fallen sports heroes from the headlines. When Ms. Leuthard appears on the TV, people go out for a drink. They don’t know and don’t care who she is. Because it doesn’t matter.

Switzerland has no troops stationed in foreign countries. It does not seek to slay dragons on the sands of Syria or Iraq. The Swiss president doesn’t presume to restrict travel, threaten to cut off funds to cities, or propose more money for crony industries.

Political power in Switzerland is local. It is constrained by local assemblies, local voters, and local customs. Much like the U.S. before the War Between the States, Switzerland’s states, called cantons, still have power of their own.

Swiss cantons – Switzerland is a small country, but even so, it is extremely decentralized. The cantons have their own tax policies and a great many political decisions are made locally. The cantons are in regulatory and tax competition with each other, which is the optimal state of affairs for the citizenry, promising the greatest possible extent of individual liberty. Political questions deemed to be of great nationwide importance are routinely decided by referendum. Incidentally, what is wrong with the insufferable “centralizers and harmonizers” of the EU is precisely that their plans and reality represent almost the polar opposite of this system – click map to enlarge.

It’s one of the most decentralized systems in the world. There is no “Swiss” national debt; each canton issues its own debt. And each suffers the consequences if it’s not repaid.

You will remember the general principle of “truth” in public affairs: It diminishes by the square of the distance from its source. The farther you get from the real events in time and space… and the grander the chutzpah of the events in question… the less likely they are to have any real meaning.

That is why local politics – as idiotic as they are – are still less gaudy and baroque than national politics. Bavaria didn’t invade Poland; Germany did. Anne Arundel County, Maryland, didn’t come up with Obamacare; Congress (aided and abetted by thousands of industry insiders) did.

A local voter is too close to the facts to put up with much nonsense. He sees the humbuggery like a plumber sees a sewer: He knows how it works and knows what’s in it.

And he knows he will have to pay for it. He is also close enough to his leaders to see their flaws. He has never met one who wasn’t either an empty suit or an immodest jackass. The “truth” is right in front of his eyes.

Losing Teeth

But today, the U.S. is no longer a confederation of states like Switzerland nor a modest republic like Finland or Argentina. Like crystal meth, the thrill of empire got into it a long time ago. Now it can’t say no to the drug, even though it can’t stop scratching and its teeth are falling out.

An empire needs an emperor. Only a tiny percentage of the population will ever get to know him personally. But everyone is expected to care about what he does – this has implications all up and down the line.

Empires follow different rules and different patterns. The average citizen has little knowledge of what goes on in the halls and broom closets of power – and little influence over them. This leaves power in the hands of a special group of insiders – the Deep State.

Collectively, this group might see that the empire is headed for destruction. But individually, the foxes, zombies, and cronies who make up the Deep State have little incentive to change their behavior.

It is like a group of addicts all spending money from the same credit card. They may see that they are going broke, but no one wants to be the one to cut back.

Competing Factions

Over time, the insiders tend to sort themselves into competing factions. The conservatives against the liberals, Republicans against Democrats, FBI against CIA, Congress against the White House, the military against Wall Street… and so forth.

Thus deadlocked by internal power struggles, the strongman leader – the emperor – grows taller and more cunning. No, he cannot change the fundamental direction of the society, its government, or its economy.

That would put him at odds with the entire Deep State. But he can tip the balance in favor of one group of insiders over another.

That is why Mr. Donald J. Trump is perhaps the perfect leader for this period in America’s history. Neither “conservative” nor “liberal”, and unbounded by the Constitution, traditional party loyalty, or ideology… he is the man the empire needs.

He can promise carrots or threaten sticks. He can offer inducements and emoluments to one Deep State faction on Monday and mis-tweet them on Tuesday.

He can rouse his supporters in Cleveland one day, and stab them in the back in Washington the next. And day by day, the empire weakens. In a meth addict, the brain is the first to go. The heart, lungs, and liver follow.

The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.

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